A U.S. corporation has purchased currency put options to hed…

A U.S. corporation has purchased currency put options to hedge a 100,000 Canadian dollar (C$) receivable. The premium is $.01 and the exercise price of the option is $.76. If the spot rate at the time of maturity is $.86, what is the net amount received by the corporation if it acts rationally?

Assume the following information:   U.S. investors have $1,0…

Assume the following information:   U.S. investors have $1,000,000 to invest: 1-year deposit rate offered by U.S. banks = 10% 1-year deposit rate offered on British pounds = 12% 1-year forward rate of Swiss francs = $1.375 Spot rate of Swiss franc = $1.40   Given this information: